R.R.Donnelley & Sons Co (R.R.Donnelley & Sons Co) Predictability Rank

View and export this data going back to 1985. Start your Free Trial

What is R.R.Donnelley & Sons Co Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

R.R.Donnelley & Sons Co Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

R.R.Donnelley & Sons Co Predictability Rank Related Terms

Thank you for viewing the detailed overview of R.R.Donnelley & Sons Co's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

R.R.Donnelley & Sons Co (R.R.Donnelley & Sons Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » R.R.Donnelley & Sons Co (NYSE:RRD) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

35 West Wacker Drive, Chicago, IL, USA, 60601

Website

https://www.rrd.com

R.R.Donnelley & Sons Co provides integrated communication strategies by helping organizations communicate more effectively by working to create, manage and produce the content on behalf of its customers. It assists its customers in developing and executing multichannel communication strategies. The company carries its operations in the United States, Europe, Asia and other countries. The maximum earnings come from the U.S.A.

Executives

Chatham Asset Management, Llc	10 percent owner	26 MAIN STREET, SUITE 204, CHATHAM NJ 07928
David Miles Houck	officer: EVP, Chief Information Officer	35 WEST WACKER DR. CHICAGO IL 60606
Dupont Albert	officer: EVP, Chief Commercial Officer	35 WEST WACKER DR. CHICAGO IL 60606
Ray James R Jr	director	COMMERCIAL VEHICLE GROUP, INC., 7800 WALTON PARKWAY, NEW ALBANY OH 43054
Kenneth E O'brien	officer: EVP and CIO	C/O RR DONNELLEY & SONS COMPANY 35 W. WACKER DRIVE CHICAGO IL 60601
Sheila M Rutt	officer: EVP and CHRO	5995 MAYFAIR ROAD, NORTH CANTON OH 44720
Terry D Peterson	officer: See Remarks	3680 VICTORIA STREET N., SHOREVIEW MN 55128
Douglas D Ryan	officer: President-Marketing Solutions	C/O RR DONNELLEY & SONS COMPANY 35 W. WACKER DRIVE CHICAGO IL 60601
J. Glynn Perry	officer: EVP, Operations	C/O RR DONNELLEY & SONS COMPANY 35 W. WACKER DRIVE CHICAGO IL 60601
Timothy R Mclevish	director	2440 BEAR HOLLOW DRIVE, PARK CITY UT 84098
Irene M Esteves	director	C/O TIME WARNER CABLE INC., 60 COLUMBUS CIRCLE, 17TH FLOOR, NEW YORK NY 10023
Michael J Sharp	officer: SVP - Chief Accounting Officer	1100 N WOOD DALE ROAD, WOOD DALE IL 60191
Daniel L. Knotts	director, officer: CEO and President	C/O RR DONNELLEY 111 SOUTH WACKER DRIVE CHICAGO IL 60606
John P Pecaric	officer: See Remarks	C/O RR DONNELLEY & SONS COMPANY 35 W. WACKER DRIVE CHICAGO IL 60601
Jamie Moldafsky	director	C/O WELLS FARGO 420 MONTGOMERY ST., 12TH FLOOR SAN FRANCISCO CA 94104